Six-month-old Indian startup Allygrow makes two global acquisitions in engineering servicesHarshith Mallya
Pune-based Allygrow Technologies is a startup focused on core engineering design, development and manufacturing engineering services for the automotive, aerospace, hi-tech, medical devices and heavy industries. It announced today that it had acquired Munich-based product development firm AE Automotive Elements and the engineering services arm of Michigan-headquartered Ranal, a provider of specialised manufacturing engineering services.
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Allygrow was founded by Prashant Kamat with $20 million in funding led by Zodius Capital in August 2015. AE Automotive Elements has core expertise in the auto domain and specialises in interior and exterior systems and vehicle body-in-white (BIW) development. Through the acquisition, it aims to help Allygrow establish its presence in the European market along with strengthening its delivery offerings to Indian and international customers. AE Automotive Element’s clients include original equipment manufacturers (OEMs) and Tier 1s such as BMW Group, Daimler, Magna, Yanfeng Visteon amongst others. Manfred Weissensteiner, CEO of AE Automotive Elements, will continue to hold a leadership role after the acquisition, and will serve as the COO of Allygrow.
Ranal on the other hand, will help Allygrow further build its competency in manufacturing engineering space. Through its delivery centres in US (Detroit) and India (Bengaluru and Pune), Ranal will help Allygrow with multi-location delivery setup, access to local talent, and ready customer-base in Americas, Europe and Asia. Ranal brings to the table its expertise of working with OEMs and Tier 1s such as General Motors, Caterpillar, KUKA, Valiant, among others. Rakesh Mahajan, CEO of Ranal, said: “Allygrow’s strengths in product development will complement Ranal’s expertise in manufacturing engineering, which definitely is a growing segment. I am sure our team members will have great prospects ahead.”
Prashant, CEO of Allygrow Technologies, said, “The investments in the two companies will help us build upon the complementary strengths of each entity and create a comprehensive service portfolio spanning across concept engineering to manufacturing support for customers globally. Furthermore, in terms of top line, these acquisitions have enabled Allygrow to reach around the $15 million revenue mark in less than six months."
Allygrow aims to reach $100 million in revenue over the next four to five years, and gain impetus in areas such as aerospace, medical technology and embedded systems. It has also claims to have identified additional targets (in the $25 to $30 million range) in the chosen verticals and are in advance stage discussions for the same. Prashant added,
The acquisitions are in alignment with the company’s growth strategy to become a pure play Engineering Research and Development Services (ERDS) provider with end-to-end capabilities.
Equirus Capital advised Allygrow on both the deals. Neeraj Bhargava, Senior MD and CEO of Zodius, said: “Prashant and the Allygrow team are off and running with two high quality acquisitions and their sales momentum is fantastic.”
Engineering services space is at an inflection point and is expected to grow at an exponential pace with traditional automobile and aerospace sectors now leveraging digital and more advanced technologies. Tesla and SpaceX would be good examples of the same. Then there are sectors like medical and bio-medical devices that are being sucked into the Internet-of-Things (IoT) revolution. With different sectors and industries growing at rapid paces, engineering service providers will be judged based on their ability to provide high quality and consistent services at both the local and global levels.
In recent times. the Indian startup ecosystem has flexed its muscles and shown the world that the country that was in the past considered an 'outsourcing destination' has now acquired core business expertise and the ability to acquire global startups. Over the past year, Infosys made more than five global acquisitions. Zomato acquired US based NextTable in April 2015, while expanding globally.
So it is heartening to see more India-based startups like Allygrow go after the global market and make cross-border acquisitions to help them boost their growth. While still fairly young, at just over six-months-old, the Zodius-backed startup is looking to create a comprehensive engineering services portfolio for customers globally.
Website: Allygrow Technologies